Seize and Dismiss: A Case of IRS Failure To Follow Its Own Rules.

The Internal Revenue Service will try to get money from taxpayers any way it can. And that means targeting innocent American businesses as tax evaders and terrorists under the Bank Secrecy Act.  Even though Congress pressured the IRS into changing its policies last year, the IRS has not yet begun efforts to cease and desist. The IRS continues to turn the lives of business owners upside down and in many cases ruin their businesses through this program, also referred to as the Civil Asset Forfeitures Act. Yet, their activities are being observed by groups such as The Institute for Civil Justice, a law firm in Arlington, VA, that has represented several business owners and helped them get their cases overturned and the money the IRS took from them returned.

Another case was in the headlines recently in which the IRS seized $107,000 from a small business owner. Fortunately they were made to dismiss the case and return the money to the owner once the Institute for Civil Justice got involved. It seems the IRS is like a child that has misbehaved and gotten away with its bad behavior for so long that even though it has been reprimanded and told to change, it hasn’t been able to break the habit yet. Prior to the pressure from Congress, the IRS was free to seize bank accounts without ever having to prove any criminal behavior on the part of the business owner. And the IRS never had to return the money, even when the business owner went to the expense of proving their innocence. They kept the money and ruined lives without consequence.

So, being forced to dismiss cases and return funds is real progress. Like a spoiled, petulant child, the IRS must be forced into compliance with its own agreement to change.  A recent article in which the IRS case was reported in detail, said regarding the recent dismissal, ” In moving to drop the case almost half a year after the IRS announced its policy change, the government cited the change in policy as its reason for backing down.” In other words, had it not been forced, the IRS would not have backed down. The article continued with a perspective shared by an attorney from the Institute of Justice, “The government in this case had to have its arm twisted to follow its commitment to property owners …That shows reform of the civil forfeiture laws cannot be entrusted to voluntary policy changes from the government. What is truly needed is binding reform from Congress.” (www.accountingtoday.com/news/tax-practice/irs-drops-civil-forfeiture-case-74610-1.html?utm_campaign=daily

The good news is that with increased awareness about the Bank Secrecy Act (Civil Asset Forfeitures) and more and more cases of money being seized and cases being dismissed, it could make it easier for other attorneys to fight for and win for their clients who have been illegally targeted. And, with binding reform from Congress, perhaps the IRS will finally feel the sting of suffering the consequences of its actions.